The Writing Requirement That Prevents Disputes
Imagine a parent's will leaves $100,000 to a child. Years later, the parent gives that child $40,000 as a down payment for a house. When the parent passes away, the question arises. Should the child still receive the full $100,000? Or has the gift already covered part of it?
Arizona law answers with a clear rule. A lifetime gift only counts against a devise if there is written proof.
Property a testator gave to a person while the testator was alive is treated as a satisfaction of a devise in whole or in part if any of the following requirements are met: 1. The will provides for deduction of the gift. 2. The testator declared in a contemporaneous writing that the gift is in satisfaction of the devise or that its value is to be deducted from the value of the devise. 3. The devisee acknowledged in writing that the gift is in satisfaction of the devise or that its value is to be deducted from the value of the devise.
A.R.S. § 14-2609(A)Without one of these three forms of written documentation, the lifetime gift and the devise are treated as separate. The beneficiary receives both. This protects against family members arguing after the fact about what the testator "really intended."
How the Gift Is Valued
When a gift does qualify as a partial satisfaction, its value is determined at the earlier of two points. The first is when the beneficiary received the personal property. The second is when the testator died. This prevents market fluctuations from creating unfair results.
For purposes of partial satisfaction, property given while the testator was alive is valued as of the time the devisee came into possession or enjoyment of the property or at the testator's death, whichever occurs first.
A.R.S. § 14-2609(B)There is one additional detail worth noting. If the beneficiary dies before the testator, the gift is still treated as a satisfaction unless the testator's written declaration says otherwise. This can affect what the beneficiary's own heirs receive through antilapse provisions.
Families should also be aware of federal gift tax rules. Large lifetime gifts may trigger reporting requirements or reduce the giver's lifetime exemption. Documenting whether a gift is intended to satisfy a devise helps avoid both tax confusion and family disputes later.